Press release | Date: 09/03/2021 | Ministry of Petroleum and Energy| No: 014/21
The Ministry of Petroleum and Energy has approved the development plan for Northern Lights, which is the storage part of the Longship project. The final state support agreements with the companies were signed before the weekend.
— In January, the Norwegian Parliament endorsed Longship, which is the biggest climate project in Norwegian industry ever. The project will cut emissions, and facilitate value creation and new jobs. The goal is also that it will contribute to increased use of CO2 capture and storage internationally. With the approval of the development plan for the storage part of the project, Northern Lights, a new milestone has been passed, says Tina Bru, Minister of Petroleum and Energy.
Northern Lights will receive captured CO2 transported on ship to Øygarden municipality on the western coast of Norway. Here, the gas will be temporarily stored before it is sent through a pipeline to the storage site on the continental shelf. At the storage site CO2 is pumped down to a sealed reservoir for permanent storage 2600 meters below the seabed. The reservoir is located in utilisation permit 001 in the northern part of the North Sea, southwest of the Troll field and east of the Oseberg field.
Tina Bru, Minister of Petroleum and Energy will today celebrate the approval of the development plan and the launch of the company Northern Lights JV DA in a digital event today at 1200 CET. The meeting can be followed here.
The licensee has estimated the total investment under the development plan to close to six billion kroner, and annual operating costs at around 370 million kroner. The approved plan has the capacity to store 1,5 million tonnes CO2 annually, and a planned operation period of 25 years. The letter of approval can be read here (in Norwegian only).
The Storting approved state support to Longship in December, in line with the Government's proposal.
Northern Lights will be built and operated by the company Northern Lights JV DA, which is backed by Equinor, Norske Shell and Total E&P Norge. A prerequisite for this is a participation agreement between the three companies which must be approved by the Ministry.
The storage is planned with a capacity to store more CO2 than what is to be captured through the Longship project. The approved development plan includes on injection well. A potential extra injection well, as well as a potential future phase two for the storage projects, will require a new government approval.
Northern Lights is in dialogue with several European entities regarding possible use of the storage. It is an important goal for the government to lower the cost of carbon capture and storage, and that more projects will follow after Longship.
— The outlook is good. Northern Lights has already signed MoUs with eight companies, and I believe more will want to connect to the storage now that the project has been approved, says Tina Bru.
The Longship project also provides inspiration for other industry actors. Heidelberg Cement, which owns Norcem, is now considering a capture project on a cement factory in Gotland, Sweden. The facility has the potential to capture more than four times as much as in the project at Norcem.
Important milestones have been passed
After several years of negotiations state support agreements were signed earlier this year between the Norwegian government and the capture agents Norcem and Fortum Oslo Varme. The agreement with Fortum Oslo Varme is on the condition that the company secures sufficient financing from the EU or other sources.
The agreement with Northern Lights was signed 5 March. Together, the agreements that now are signed give the companies in the whole chain from capture to storage strong incentives to build and operate the projects effectively, in a way that contributes to Norway and Europe reaching their climate targets. To secure income, the capture companies must capture CO2 efficiently, while Northern Lights must sell additional capacity to other customers.
— We have made a business model where the companies must succeed commercially to recover their shares of the investments. The companies' efforts will therefore support the government's ambitions for Longship: To develop a cost-effective solution for CCS which contributes to Norway and Europe reaching their climate targets, says Tina Bru.
Construction work is now proceeding in Øygarden, where the CO2 terminal is located. The minister will be given a virtual tour of the construction site in Øygarden in today's event. Also at Norcem's factory in Brevik construction work has started.